2022 USTelecom Broadband Pricing Report: Further Proof that Competition Is Benefiting Consumers

On Wednesday, USTelecom | The Broadband Association released its third annual Broadband Pricing Index (BPI) Report. Once again, the facts demonstrate that competition between broadband service providers is benefiting consumers through ever-higher speeds and – critically, given rising costs overall – steadily decreasing prices.

"2022 Broadband Pricing Index: A Comparative Analysis Showing Decreasing Prices and Increasing Value for U.S. Broadband Service Over Time" (2022 BPI Report) focuses on two types of broadband service tiers – the most popular and the highest speed – and compares their average prices and speeds in 2020 to those from (1)  the year prior, and (2) 2015.

According to the 2022 BPI Report, over the last twelve months, prices for goods and services generally grew 8 percent. By contrast, the average cost of the most-popular tier, adjusted for inflation, fell 14.7 percent, from $42.59 to $36.33. The average price of the highest-speed tier, adjusted for inflation, decreased by 11.6 percent, from $65.78 to $58.12.

Since 2015, inflation-adjusted prices have plummeted 44.6 percent, from $65.62 to $36.33, for the most popular tier and 52.7 percent, from $122.94 to $58.12, for the highest-speed tier.

Meanwhile, average speeds for both tiers increased dramatically between 2015 and 2022:

• Download speeds for the most-popular tier grew 127.7 percent, from 43 megabits per second (Mbps) to 98 Mbps;
• Upload speeds for the most-popular tier expanded at nearly twice that rate: 249.3 percent, from 13 Mbps to 44 Mbps;
• Download speeds for the highest-speed tier increased 84.6 percent, from 141 Mbps to 259 Mbps; and
• Upload speeds for the highest-speed tier increased 107 percent, from 51 Mbps to 103.7 Mbps.

The full 2022 BPI Report is available here, an overview here. For summaries of, and links to, the first two reports, please check out these posts to the FSF Blog: 2021 BPI Report and 2020 BPI Report.

PRESS RELEASE: Reaction of FSF President Randolph May to Supreme Court's West Virginia v. EPA Decision

 

 

 

The following statement may be attributed to Free State Foundation President Randolph May with regard to the Supreme Court’s decision in West Virginia v. EPA. May, an expert in administrative law, is a former Chair of the ABA Section of Administrative Law & Regulatory Practice, a former Public Member and present Senior Fellow at the Administrative Conference of the United States, and a Fellow at the National Academy of Public Administration.

“The Supreme Court’s opinion in the West Virginia case is a consequential decision for the administrative state because it further cements the ‘major questions’ doctrine in our jurisprudence as a means of protecting the separation of powers embedded in the Constitution. Despite the complexities of the Clean Air Act, the Court’s ruling is straightforward: an agency lacks the authority to adopt regulations in cases of major economic and political significance absent a clear statement from Congress delegating the agency such authority. Here, the Court concluded that EPA’s new comprehensive generation-shifting regulatory approach, with its major impacts on the economy, went beyond anything Congress clearly authorized.”

“The Court’s reliance once again on the major questions doctrine likely will diminish further the effect of the Chevron doctrine which requires courts to defer to agencies’ reasonable interpretations of their own statutes. This, in turn, likely will constrain the overly broad discretion of agency regulators to adopt major rules without a clear statement from Congress that they possess the authority to do so. This is consistent with the Founders’ view of the Constitution that it is the duty of the judiciary, not the 'Fourth Branch' consisting of unelected bureaucrats, to say what the law is."

NOTE: One of my pieces is cited in Justice Gorsuch’s concurring opinion.

NOTE: For relevant background, also see the law review article, "NFIB V. OSHA: A Unified Separation of Powers Doctrine and Chevron's No Show,” by Randolph May and Andrew Magloughlin, forthcoming in the South Carolina Law Review.

Justice Kavanaugh's US Telecom Dissent Could Govern Platform Speech

Slightly less than a month ago, in NetChoice v. Paxton, the Supreme Court restored a preliminary injunction that prevented Texas's social media common carriage law, HB20, from taking effect. I already wrote about Justice Alito's dissent in that case, and as I noted back then, the Supreme Court's 5-4 majority did not explain its reasoning. This time, I'm going to take a stab at guessing that reasoning, and my guess involves then-Judge Kavanaugh's dissent in US Telecom v. FCC (2017).

Justice Kavanaugh, a member of the NetChoice majority, possibly showed his cards years earlier while dissenting from the denial of en banc review as a D.C. Circuit Judge in US Telecom. In that case, Kavanaugh explained his belief that the First Amendment bars the imposition of "net neutrality" regulations, including prohibitions on blocking, throttling, and paid-prioritization, on broadband providers. Specifically, Kavanaugh relied on Turner Broadcasting System v. FCC (1997), which he interpreted as ruling that First Amendment protections for editorial discretion apply to modern communications services, even though Turner addressed cable television rather than broadband. Kavanaugh would have applied the editorial protection afforded to cable providers in Turner to broadband providers.

Here, of course, we deal with Internet service providers, not cable television operators. But Internet service providers and cable operators perform the same kinds of functions in their respective networks. Just like cable operators, Internet service providers deliver content to consumers. Internet service providers may not necessarily generate much content of their own, but they may decide what content they will transmit, just as cable operators decide what content they will transmit. Deciding whether and how to transmit ESPN and deciding whether and how to transmit ESPN.com are not meaningfully different for First Amendment purposes.

Then, and most relevant to guessing the Court's possible reasoning in NetChoice, Kavanaugh argued that, in order to overcome the "intermediate scrutiny" protection the First Amendment affords to editorial discretion, the government needed to make a credible finding that broadband providers had market power. The FCC's order adopting the net neutrality regulations did not do that. To show the consequences of that omission, Kavanaugh argued that, if that approach were adopted, Congress could impose similar regulations on Internet platforms such as Facebook, Google/YouTube, and Twitter, and even traditional publishers like the New York Times, without obstacle.

If market power need not be shown, the Government could regulate the editorial decisions of Facebook and Google, of MSNBC and Fox, of NYTimes.com and WSJ.com, of YouTube and Twitter. Can the Government really force Facebook and Google and all of those other entities to operate as common carriers? Can the Government really impose forced-carriage or equal-access obligations on YouTube and Twitter? If the Government’s theory in this case were accepted, then the answers would be yes. After all, if the Government could force Internet service providers to carry unwanted content even absent a showing of market power, then it could do the same to all those other entities as well. There is no principled distinction between this case and those hypothetical cases.

The underlying sentiment of Kavanaugh's "slippery slope" argument above is that there is something wrong with common carriage regulation of Internet platforms and traditional publishers. And the Court long ago ruled that something is indeed wrong with common carriage style regulation of newspapers in Miami Herald Publishing Co. v. Tornillo (1974).

Perhaps the Court's majority in NetChoice reached the same conclusion as Kavanaugh in US Telecom, relying on cases like Turner and Tornillo as an indication that NetChoice is likely to succeed on the merits of its case, which is one of the factors for granting a preliminary injunction.

For now, we do not know the Court's reasoning, but Kavanaugh's opinion in US Telecom is a good place to start guessing. And we also do not know, assuming the majority embraced Kavanaugh's reasoning, whether a majority of the Justices would do the same in the context of common carriage regulation of broadband service. As Justice Alito explained in his NetChoice dissent, the Court has taken different First Amendment approaches for different technologies.

But we do know that, as NetChoice continues to move through the courts, it will have broad implications on communications and First Amendment law.

#FSFConf14 Panel of CEOs Offer Perspectives on Net Neutrality Regulation

The Free State Foundation's Fourteenth Annual Policy Conference – #FSFConf14 – was held on May 6 in Washington D.C. The conference featured a group of distinguished speakers on the "Hottest Topics in Communications and Internet Policy" panel. One of those hottest topics discussed was network neutrality regulation. 

When asked about his views about net neutrality regulation, USTelecom President & CEO Jonathan Spalter stated:

To look at the last two years of our experience with the Internet and unbelievable amount of streaming, health care, and civic engagement and conclude that—somehow—we have a net neutrality problem in the United States defies logic and reason. Ideological? Yes. Common sense? No. Fact based? Certainly not. If we could expend some of the energy that we're giving to this rinse-and-repeat cycle of considering the Title I/Title II consideration and draw that to the more fundamental issue of getting broadband deployed to every American that needs it, I that would be a much better use of our time and resources than rehearsing old and stale debates of resurrecting dead and gone net neutrality provisions that are rooted in a 1934 law. 

NCTA President & CEO Michael Powell offered his views: 

I think the government has a hard time demonstrating on any measure of reasonableness how they're going to make the Internet world better for consumers and providers by virtue of these rules. We haven't had rules since 2015. There is no pattern and practice of the supposed negative behavior that we're apparently chomping at the bit to engage in. Quite the opposite has happened. Contrary to predictions, our network speeds have increased 800%. Our prices are one of the lowest, lagging consumer inflation in the country—only at around 2.5% to 2.8% of the CPI, which is moving at 8.5%. You've had 5G networks invested in in the interim, you've had 10G in the cable industry, you’ve had fiber builds and the country has moved on. 

 

The two most central focuses of broadband policy today is the infrastruture mission, which is job one, and the complexity of issues that rise from Big Tech. I find this issue to be painfully distracting from the issues that matter. It will absorb an enormous amount of time, effort, labor, and conflict. And no matter what the rules say, it will make very little difference to the Internet experience that consumers are getting today. And it's even more disheartening because the rules are always born with a fatal flaw. And that flaw is: they're easy to change and they'll change in the next administration. When will we stop the madness? It doesn't even matter what the rules say. You could be two years from them being eliminated again, by the next administration. If someone were genuinely committed to ending the merry-go-round, it could be done. It could be done easily. I hope and urge the FCC to do it. But I doubt it because it's become a form of political virtue signaling, not policymaking. 

A contrary viewpoint was offered by Public Knowledge President & CEO Chris Lewis: 

Net neutrality protections are needed because the harms that we're concerned about are real. And that's why just about every company that is a member of these trade associations, when asked the actual protections, supports them: no blocking, no throttling… No paid prioritization—I don't know if they agree with that or not. But I think there is a real important case for it, because as the DOJ said many years ago, broadband providers sit at place in the marketplace where they have the ability and the financial incentive to preference themselves or preference others. These are basic rules of the road. And if we can agree on the rules of the road, if the companies agree that those rules, then it's really about how you implement them. And that is really what the debate is about. That is why you hear about Title II. I would love it if the Congress was serious… about creating legislation to end the merry-go-round… But they haven’t seemed serious. We hear about task force being created in the Senate to create a net neutrality law. This task force isn't meeting with anyone. They haven't met with us. And we told them that we’re ready to come and meet with them. 

 

This is why the folks advocating go to the FCC every chance we get and say "We need to create rules." This is why we advocated for rules, the strong ones out of California, that got upheld in the court four times now. And hopefully, this is why we haven't seen egregious violations by companies since the 2015 rules were repealed—because there is a law in California, because they know that we’re going to lists in front of policymakers and show them that these violations are real. But they are real and they’re not getting investigated, whether you're talking about AT&T preferencing their own video services when data caps are applied, Comcast doing the same thing, and the incident with emergency services getting throttled in California during wildfires. These need to be looked at by an agency with authority…

 

If you're talking about digital platforms, we also advocate for a digital regulatory agency to deal with non-discrimination issues at that level.

And CTIA President & CEO Meredith Attwell Baker offered her take on net neutrality regulation:

We need one rule, it needs to come from Congress. Consumers are benefitting from an Open Internet. I don't think that what consumers want has really changed, and I think we're giving them that. The only thing that probably has changed is that in 2022 it shouldn't be ISP-specific, only for ISPs. 

For more from this group of CEOs at #FSFConf14, be sure to watch the video online. 

 

(*Note: The #FSFConf14 quotes contained in this blog are based on an unofficial, edited transcription made by the author of this blog. The edits were made for purposes of readability but none of the meaning was changed in doing so.)

ACA Connects Broadband Competition Report Undermines Common Carriage

Last week, ACA Connects released "Broadband Competition Is Thriving Across America," a report that argues common carriage regulation of broadband providers is inappropriate in light of increasingly competitive broadband market conditions. The report projects future competitive conditions in the broadband market based on existing FCC data, the historic pace of deployment, and provider announcements for increased fiber deployment over the next few years.

ACA projects that by December 2025:

• Over 95% of homes will have access to at least one provider of 100 Mbps/20 Mbps speeds;
• Over 95% of homes will have access to at least one provider of 100 Mbps/20 Mbps and one provider of 25 Mbps/3 Mbps speeds;
• 84% of homes will have access to at least two providers of 100 Mbps/20 Mbps speeds.

At this level of competition, harms from common carriage regulation, including reduced investment, efficiency, and innovation, are likely to outweigh its potential benefits, which could include price reductions and better speeds in uncompetitive areas. This is because the vast majority of the country would have competitive conditions in the broadband market, so common carriage regulation would fail to improve the service quality that results from competition.

Additionally, ACA's report argues that the NTIA's BEAD Program eliminates the need for common carriage regulation. It is likely that the BEAD program, or other federal broadband programs, will subsidize new deployment in areas that have only one broadband provider. Thus, common carriage is not needed because BEAD will fund new entry, correcting any market failures common carriage could address.

ACA's report also argues that small broadband providers should be exempted from common carriage regulations if they are implemented despite the evidence that they will not improve competition. This is because nearly every household has at least one large broadband provider. Thus, in almost every market where a small provider competes against a large provider, the large provider will be subject to common carriage regulations, and the small provider would have to offer prices or speeds that reasonably compete with the service standards imposed on the large provider in order to attract any customers.

Free State Foundation scholars have long argued that common carriage regulation of the broadband market is unwarranted and potentially harmful. The FCC's 2018 Restoring Internet Freedom Order, which repealed common carriage regulation of broadband services, cited our supportive comments over 50 times. And Free State Foundation President Randolph May and Director of Policy Studies Seth Cooper wrote a book dedicated to this subject, "A Reader on Net Neutrality and Restoring Internet Freedom," which can be purchased on Amazon by clicking the hyperlink.

Mobile Broadband Speeds Now Match 2020 Fixed Speeds

When the Free State Foundation filed Comments in the FCC's 2020 Communications Marketplace Report proceeding, average fixed broadband download speeds were roughly 130 Mbps, according to Ookla. Today, the most recent Ookla data (May 2022) shows that average mobile broadband download speeds are 130 Mbps. So, in just two short years, mobile broadband speeds caught up to the performance of fixed networks in 2020. Of course, today speeds for fixed networks are higher than they were in 2020.

This fact highlights the growing senselessness of the Commission's continued refusal to recognize intermodal competition in the broadband marketplace. Rather than acknowledge that broadband providers of all stripes compete with each other, the Commission slices the broadband marketplace into separate techno-functional categories. Mobile wireless is its own market in the Commission's view, and that market excludes any competition from high-speed wireline deployments by cable and fiber providers.

The accelerating network performance of mobile broadband, likely driven by the rollout of 5G service, makes clear that broadband providers compete intermodally. Of course, as noted above, the speed of fixed networks also improved over the last two years, and now exhibit average download speeds above 220 Mbps, per Ookla's May 2022 data. But even if they hadn't, and mobile network speeds were par with fixed network speeds, it is more than reasonable to assume that many customers might have canceled their fixed subscriptions. The improvements made by mobile networks may have driven fixed networks to make their own upgrades to maintain their speed advantages.

That's clear evidence of intermodal competition.

The Commission should abandon its techno-functional categories and instead assess competition in the "broadband marketplace." That broader market definition would account for intermodal competition between fixed, mobile, satellite, and any other types of broadband providers. It will be increasingly difficult to ignore intermodal competition as more evidence of it emerges from the competitive broadband market conditions today.

#FSFConf14 Panelists Offer Perspectives on Broadband Mapping

The Free State Foundation's Fourteenth Annual Policy Conference – #FSFConf14 – was on May 6 in Washington D.C. The timely release of broadband maps for identifying unserved areas needing targeted subsidies and for avoiding overbuilding and waste was an important topic of discussion in both #FSFConf14 panels. 

During the "View from the FCC" panel, former Commissioner Mignon Clyburn emphasized the importance of federal agencies sharing information regarding technologies, maps, and coverage. And regarding broadband availability and unserved areas, she added that "[a] lot of things we’re unsure of, the maps will make more clear." 

FCC Commissioner Brendan Carr included broadband maps among the important priorities for federal broadband policy: "We have to prioritize unserved areas, get the maps done, and continue to grow our work force – for the shortage on the tower climbers' side and the fiber splice side. We need infrastructure reform as well."  

FCC Commissioner Nathan Simington addressed broadband maps in the context of the Broadband Equity, Access, and Deployment (BEAD) Program as well as the challenges that the federal agencies and state governments have before them in program implementation:  

The thread uniting what we've heard from my colleagues up here is the importance of, on the one hand, communication among agencies for effective coordination and, on the other hand, oversight. The two go hand and hand, and the join at the point of mapping. I think what's important is that the FCC is not just delivering maps but also a mapping framework that can continue to be updated and continue to serve as a resource across all levels of government. 

 

Now BEAD does something quite interesting. BEAD allows a program to be tailored to the specific needs of the state. And every time I look at the specific needs of a state, I find something unique. It's expensive to drill in Florida because coral wears down bits wear down faster. On the other hand, Florida is flat. Some states have a very lumpy geography. Some rural states have highly concentrated populations in a small number of villages. Other rural states have widespread populations across farms. Every state is a unique challenge so BEAD is attempting to address that. And, of course, we need to have an extremely comprehensive mapping framework in order to address that. But what that means is the mapping framework coming out of the FCC has got to be valuable to the NTIA, it's got to be valuable the state governments that are in the process of delivering and implementing these plans together with the NTIA, and then there's got to be a constant feedback process. 

 

We've put an unprecedented amount of money out there. Frankly, if technology had not moved on, everyone would have been fine with 25 Mbps/3 Mbps speeds. Now we expect high quality streaming video and we expect it two ways in order for people to work from home to be education at home, to engage in telemedicine, so the target has moved. And that forces us to figure out how to fit past programs into the current outlay. There's a been a commitment across the federal government, then we stepped on the gas rather hard to put more money into it… 

 

As a result, we're still evolving in our sophistication of response at the state level. Some ISPs are telling us the states are engaging in a very sophisticated way. And others are telling us, "We're reporting cases of overbuilding or duplicative building or of. funding through multiple programs for a single build and the states are having a hard time responding to it" because their broadband offices aren't sufficiently developed in some cases. It's my hope that states continue to develop their capacities in this area. That the NTIA, I can't say I envy them, the huge job of implementing a program of this scale. Obviously, they have to do a lot of hiring to do it. It's going to require transformation work at the agency. I've got no doubt that they’re up to the job, but it’s a big job, right? And then it’s going to require continued proactive engagement from the FCC with all those other stakeholders to make sure that the end result is acceptable to the American public and that it was a good use of public money. 

During the "Hottest Topics in Communications and Internet Policy" panel, pointed concerns were raised about the lack of harmonization in the maps and their usage by federal agencies and state governments. USTelecom President & CEO Jonathan Spalter stated:

Let's be really clear here. We have yet to have consistent national harmonized maps that are going to be needed to ensure that we will have the most efficient and highest and best uses of the dollars that are going to be moving through the states. There's a promissory note that we've gotten from the Chairwoman that these will come in the fall. I hope that's right.

NCTA President & CEO Michael Powell also offered insightful and balanced assessment about the need for effective use of maps as well as program implementation difficulties that lay ahead: 

The statute itself requires the maps as a predicate to distributing funds, so they’re legally required in order to open the spigot. But they've been identified long before this legislation as essential to attacking this problem because you have to know where the problem is, and have some kind of authentic, authoritative consensus about where the problem is in order to invest efficiently. 

 

But the problem is, first of all, there are multiple maps. This worries me, because the maps, in a perfect world, would be integrated. I think the Chairwoman is talking about a set of maps of unserved areas, but not the set of maps that include funding that is already been distributed under RDOF [the Rural Digital Opportunity Fund] and other programs which isn't due out until 2023. Basically, you have one sovereign distributing monies from different pocketbooks to potentially the same areas. If they're not coordinating those in the mapping exercise, you get a set of maps that are only about the initial effort, but next year you get a set of maps about existing programs, and you have areas full commitments by providers who received funds to serve those areas, and all of the sudden you got a state who views the same area as unserved who views the areas as unserved using FCC maps. 

 

Are the FCC maps preemptive? Are they the law of the land? Or if California decides they don’t like what the maps say, are they going to use some Californian map?  That's not completely clear. We have a view about that. But that’s going to be a big problem too. 

 

The last thing I'll say is, a map is data and people will fight about it forever. We keep acting like the maps will be effective, and I hope they are as effective as we hope they will be. But I guarantee you, people will weigh whether they are planning to invest money in the places they want or not and then there will be a lot of arguing and appealing and challenging about the specifics of the maps. It's necessary, it's essential, but it also will be messier than some of the hoped-for thinking. But we’ll work through it. 

For further discussion on other communications and internet policy topics at #FSFConf14, videos for the FCC Commissioners panel and the Hottest Topics panel are available online. 

 

Also, FSF President Randolph May and Senior Fellow Andrew Long wrote about the broadband maps as necessary to accurately target broadband subsidy support in their November 2020 Perspectives from FSF Scholars, "Congress Should Fund Needed Broadband Maps This Session." Mr. Long offered additional insights in his March 2022 Perspectives, "Overlapping Broadband Appropriations Demand Agency Coordination."

 

(*Note: The #FSFConf14 quotes contained in this blog are based on an unofficial, edited transcription made by the author of this blog. The edits were made for purposes of readability but none of the meaning was changed in doing so.)

Court Declares Maryland's Compulsory Licensing Law for Ebooks Unconstitutional

On Monday June 13, the U.S. District Court for the District of Maryland entered a final judgment in AAP v. Maryland. At issue in the case is a state law that forced publishers of literary works in ebook and digital audiobook formats to license their works to public libraries on what the state or state courts decide are "reasonable terms." In February of this year, the District Court issued a preliminary injunction that barred Maryland's enforcement of the forced access law. Based on its earlier opinion, the court declared on June 13 that "[t]he Maryland Act is unconstitutional and unenforceable." The court's judgment is fully justified, as it is solidly based on preemption principles and judicial precedents. 

Free State Foundation President Randolph May and I analyzed the court's opinion in from February in our March 2022 Perspectives from FSF Scholars, "State Laws Forcing Publishers to License Ebooks to Libraries Are Unlawful." As we explain in our Perspectives: "[U]nder Section 106 of the Copyright Act, copyright owners possess exclusive rights to decide who can distribute or make available their copyrighted works and on what terms and conditions. State laws that force publishers to license copyrighted works to libraries clearly conflict with federal law." Our Perspectives made the point that the court's opinion in AAP v. Frosh should be persuasive to state legislators or other courts considering similar laws 

 

According to Supreme Court jurisprudence, "conflict preemption" occurs when state laws pose "an obstacle to the accomplishment of a significant federal regulatory objective" or when it is impossible for a party to comply with both federal and state laws. In AAP v. Maryland, the District Court correctly concluded that the Maryland law is conflict preempted because it poses an obstacle to the objectives and purposes of the Copyright Act in securing copyrights owners' exclusive right to distribute. Copyright owners enjoy an exclusive right to distribute their works to persons of their choice. 

 

FSF President May and I also focus on the problems of price regulating ebooks in our May 2022 Perspectives, "State Restrictions on Ebook License Prices Are Preempted by Federal Law." In that Perspectives, we explain that "[p]rice regulation of ebook licensing to libraries is unwise and contrary to federal copyright law. States interested in expanding public libraries' ebook collections should instead dedicate additional money from state treasuries to libraries."

PRESS RELEASE: Supreme Court's Decision in American Hospital Association v. Becerra

The following statement may be attributed to Free State Foundation President Randolph May with regard to the Supreme Court's decision in American Hospital Association v. Becerra. May is a former Chair of the ABA Section of Administrative Law & Regulatory Practice, a former Public Member and now Senior Fellow at the Administrative Conference of the United States, and a Fellow at the National Academy of Public Administration. 

"Today's Supreme Court's decision in American Hospital Association v. Becerra may be as significant for the administrative state for what it doesn't say as for what it does. Despite the fact that petitioners specifically asked the Court to defer to the Department of Health and Human Service's interpretation of the Medicare statute under the Chevron deference doctrine, the Court's unanimous opinion doesn't even mention Chevron. Instead, the Court rejected HHS's position based on the text and structure of the Medicare statute.

While not addressing the continuing vitality of Chevron, I believe the Court's total silence portends that, one way or the other, Chevron’s deference domain is shrinking and, going forward, Chevron will play a less prominent role in review of agencies' own interpretations of their enabling statutes. Because, as Chief Justice Marshall said, the Constitution assigns to the judiciary the duty 'to say what the law is,' this would be a positive development consistent with the separation of powers that is the primary structural safeguard in our Constitution."

NOTE: For relevant background, also see the forthcoming law review article, "NFIB V. OSHA: A Unified Separation of Powers Doctrine and Chevron's No Show," by Randolph May and Andrew Magloughlin. Because no member of the Court even mentioned Chevron in the Court's vaccine mandate opinions, the article concludes: "The total absence of any references to Chevron deference in the Court's opinions in NFIB, as well as in the parties' briefings, possibly could signal Chevron's demise or at least the shrinking of its domain."

Big Administrative Law Decisions Pending at SCOTUS

As the Supreme Court wraps up its 2021-2022 term this summer, it will issue opinions that could reshape administrative law. West Virginia v. EPA and American Hospital Association v. Becerra, both of which the Court has not yet decided, involve separation of powers issues that define the scope of the executive branch's powers. The Court might pare back the executive branch's ability to make law as early as tomorrow morning.

West Virginia v. EPA is a challenge to an environmental rule that West Virginia and other petitioners argue exceeds the EPA's authority. Petitioners argue that the EPA's rule is unlawful under the "major questions doctrine," which requires that Congress "speak clearly when authorizing an agency to exercise powers of vast economic and political significance." Randolph May and I wrote a law review article, NFIB V. OSHA: A Unified Separation of Powers Doctrine and Chevron's No Show, on this subject. A ruling in this case could make it harder for agencies to issue sweeping rules based on vague or unspecific authority in laws passed by Congress.

American Hospital Association v. Becerra involves a challenge to an administrative interpretation of a complicated Medicare statute. For our purposes, during the oral argument in this, the Court appeared to consider overturning or narrowing "Chevron deference." Chevron specifies that courts will uphold agency actions that are based on statutory language that is ambiguous or silent, so long as the actions are based on reasonable interpretations of the relevant statutes. In other words, rather than determining the best reading of the law as the Constitution tasks it to do, the judiciary will permit any reasonable interpretation of a vague or ambiguous law. A ruling in Becerra may limit the executive branch's power by instructing the judiciary to be less deferential.

We will closely read these opinions when the Court releases them. We also note that the two legal issues – the major questions doctrine and Chevron deference – mesh together. Read our law review article mentioned above to learn more.

GAO, FCC's Carr Echo Broadband Funding Coordination Concerns

In a March 2022 Perspectives from FSF Scholars, I (1) called attention to the numerous, overlapping federal initiatives to extend broadband infrastructure to those areas that remain unserved, and (2) underscored the need to coordinate those efforts to ensure that taxpayer dollars are put to good use and the goal of ubiquitous connectivity in fact is achieved.

A recent report issued by the Government Accountability Office (GAO) made similar points – and inspired FCC Commissioner Brendan Carr, consistent with his comments during the Free State Foundation's Fourteenth Annual Policy Conference, to call for the Biden Administration to "put a national strategy in place to ensure that the federal government delivers on this opportunity to end the digital divide."

In "Overlapping Broadband Appropriations Demand Agency Coordination: New FCC Maps Can Track Grants, Avert Waste," I identified some of the biggest federal broadband subsidy programs, in terms of dollar amounts, and presented (via the chart reproduced below) a theoretical total spend of over $450 billion dollars.

The GAO report, entitled "Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide," identifies "at least 133 funding programs that could support increased broadband access" under the purview of 15 different agencies – and warns that "[t]his patchwork of programs could lead to wasteful duplication of funding and effort."

Accordingly, the report recommends that the "Executive Office of the President … should develop and implement a national broadband strategy with clear roles, goals, objectives, and performance measures to support better management of fragmented, overlapping federal broadband programs and synchronize coordination efforts."

In a Statement dated June 10, 2022, Commissioner Carr marked the release of the GAO report by "sounding the alarm," yet again, "on the troubling lack of oversight and coordination when it comes to the federal government's expenditure of hundreds of billions of dollars that Congress appropriated for ending the digital divide."

Contending that "it appears that the Administration has turned the spigot on full blast and then walked away from the hose," Commissioner Carr called for the creation of a national strategy.

As my colleague Seth Cooper highlighted in a May 31, 2022, post to the FSF Blog, Commissioner Carr made similar points during a #FSFConf14 panel moderated by Mr. Cooper.

Among other things, Commissioner Carr noted that, by his count, ten times the amount needed to connect every American – $80 billion – has been appropriated, but absent improved interagency coordination, he remains "very concerned that we're going to flash forward a couple of years, the $800 billion dollars is going to gone and we're still going to have a significant portion of the digital divide that we didn't close."

Justice Alito's NetChoice v. Paxton Dissent Shows Openness to Platform Common Carriage

Justice Alito penned an emergency docket dissent last week in NetChoice v. Paxton  that may shed light on whether the Supreme Court would uphold common carriage or must-carry obligations for social media platforms. Alito, joined by Justices Gorsuch and Thomas, argued that the Court should not have restored a district court's preliminary injunction of Texas's HB20, which prevented social media platforms with over 50 million users from banning users and removing user-generated content on the basis of viewpoint.

While defending the law in a federal district court, Texas Attorney General Ken Paxton described HB20 as a form of common carriage regulation. The District Court enjoined HB20 for infringing on platforms' First Amendment right to editorial discretion. A Fifth Circuit panel stayed that decision, but the Supreme Court has now vacated that stay, restoring the preliminary injunction.

However, it is unclear why because the Court's 5-4 majority, which included a unique breakdown of Chief Justice Roberts and Justices Barrett, Breyer, Kavanaugh, and Sotomayor, did not explain its reasoning. Justice Kagan voted against restoring the preliminary injunction, but she did not join Justice Alito's dissent.

Image credit: Wikipedia user JoshEllie1234. No alterations made.

Justice Alito, applying the requirement that applicants for preliminary injunctions must be likely to succeed on the merits under existing law, argued that common carriage of social media is a novel issue unaddressed by precedent. Alito further explained that "[i]t is not at all obvious how our existing precedents, which predate the age of the internet, should apply to large social media companies . . ." because while some cases have recognized a First Amendment right to editorial discretion, others have denied it.

The law before us is novel, as are applicants' business models. Applicants claim that §7 of HB20 interferes with their exercise of "editorial discretion," and they maintain that this interference violates their right "not to disseminate speech generated by others." Under some circumstances, we have recognized the right of organizations to refuse to host the speech of others. See Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston, Inc., 515 U. S. 557 (1995) (parade organizer); Miami Herald Publishing Co. v. Tornillo, 418 U. S. 241 (1974) (newspaper). But we have rejected such claims in other circumstances. For example, in PruneYard Shopping Center v. Robins, 447 U. S. 74 (1980), we rejected the argument that the owner of a shopping mall had "a First Amendment right not to be forced by the State to use his property as a forum for the speech of others." And in Turner Broadcasting System, Inc. v. FCC, 512 U. S. 622 (1994), we declined to apply strict scrutiny to rules that "interfere[d] with cable operators' editorial discretion by compelling them to offer carriage to a certain minimum number of broadcast stations."

Alito also explained that Texas made arguments similar to those accepted by the Court in cases upholding common carriage or must-carry regulations.

First, Texas contends that §7 does not require social media platforms to host any particular message but only to refrain from discrimination against a user’s speech on the basis of "viewpoint," and in this respect the statute may be a permissible attempt to prevent "repression of [the freedom of speech] by private interests." Second, Texas argues that HB20 applies only to platforms that hold themselves out as "open to the public," and as neutral forums for the speech of others. These representations suggest that the covered social media platforms—like the cable operators in Turner—do not generally "'convey ideas or messages [that they have] endorsed.'" Third, since HB20 is limited to companies with "50 million active users in the United States,” Texas argues that the law applies to only those entities that possess some measure of common carrier-like market power and that this power gives them an "opportunity to shut out [disfavored] speakers."

Apart from the merits, Alito explained that the "procedural posture" of the case also warrants against granting a preliminary injunction.

In conclusion, Alito made clear that he has "not formed a definitive view on the novel legal questions that arise from Texas’s decision to address the 'changing social and economic' conditions it perceives." But the perceived novelty of the legal issues presented in this case, to Justices Alito, Gorsuch, and Thomas, warranted against a preliminary injunction.

Alito's dissent indicates that at least three justices are willing to entertain the legality of common carriage or must-carry regulations on social media platforms. And Justice Kagan, though she did not join Alito's dissent or write for herself, may likewise be open to the prospect. This case will be important to watch as the lower courts, and possibly the Supreme Court itself, address the merits in later stages.

FCC Adopts Notice Seeking Input on Offshore Spectrum Use

At its June 8 public meeting, the FCC adopted a Notice of Inquiry on possible future demands and use cases for offshore spectrum. The Notice seeks comment on spectrum rights models and initial license assignment mechanisms for offshore commercial or private maritime or aeronautical uses. 

The Commission has done right by opening of the proceeding on offshore spectrum and adopting the Notice. The agency has a responsibility to promote valuable usage of spectrum by the American public. And the Notice can help serve that purpose. Hopefully, the Notice will yield insights and information about how the agency can ensure that offshore spectrum can be put to its highest and best use. By building a solid factual record, the Commission potentially could pursue steps to make offshore spectrum more widely available for licensed and unlicensed uses. 

In November 2021, Free State Foundation President Randolph May and I published a Perspectives from FSF Scholars paper titled "Constitutional Considerations for Proper Spectrum Policy: A Preference for Private Property Rights and Market Competition." That Perspectives offers a high-level approach to federal spectrum policy that ought to be applied and adapted as circumstances reasonably require to offshore spectrum uses as well as to onshore uses. 

FCC Takes Further Steps to Stem the Tide of Illegal Robocalls

American consumers to continue to receive extraordinarily high volumes of unwanted and illegal robocalls. Youmail estimated that nationwide robocalls in the month of May 2022 totaled 4 billion. 

The FCC has recently announced the latest steps that it has taken to address the problem:

• On May 19, the Commission announced that nine state attorneys general have joined the agency's existing agreement with a majority of states "to share evidence, coordinate investigations, pool enforcement resources, and work together to combat illegal robocall campaigns and protect American consumers from scams." (The Commission's partnership with other states was the subject of an April 2022 blog post).

• On May 20, the Commission released an order in which it places new obligations on gateway providers that are the entry point for calls to the U.S. that originate from foreign countries. The requires gateway providers to: (1) "develop and submit traffic mitigation plans to the Robocall Mitigation Database" (2) "apply STIR/SHAKEN caller ID authentication to all unauthenticated foreign-originated Session Initiation Protocol (SIP) calls with U.S. North American Numbering Plan (NANP) numbers"; and (3) "respond to traceback requests in 24 hours, block calls where it is clear they are conduits for illegal traffic, and implement 'know your upstream provider' obligations."

• On June 6, Chairwoman Rosenworcel signed a Memorandum of Understanding on combatting robocalls with the top Canadian government agency official for telecommunications. 

It is widely known that majority of unwanted robocalls to American consumers originate from outside the U.S. Hopefully, these actions taken by the FCC will help reduce the mass number of illegal robocalls and ID-spoofing scams that target consumers. 

#FSFConf14: FCC Commissioner Simington on Receiver Interference Policy

The Free State Foundation's Fourteenth Annual Policy Conference – #FSFConf14 – was on May 6 in Washington D.C. The opening panel for the conference featured current FCC Commissioners Brendan Carr and Nathan Simington, along with former FCC Commissioner Mignon Clyburn. One of the communications law and policy topics that came up during the panel conversation was receiver interference immunity. 

Receiver interference immunity policy was first brought to public attention by Commission Simington at FSF's 15th Anniversary Gala Celebration in October 2021. On March 24, the Commission issued a Notice of Inquiry to look into the issue. At #FSFConf14, Commissioner Simington had more to say on the matter:

There's been a significant scientific and engineering effort for some time to try to resolve some of the problems with entrenched poor-quality receivers. And poor-quality receivers are always a little bit of a judgment call: How do you balance it against price? How do you balance it against performance? How do you balance it against other criteria? But there is no doubt that there are a lot of services out there where the receivers have not kept pace in terms of spectral efficiency with you see in sectors where that is more prioritized, like wireless mobility. What I'd like to see come out of the proceeding is an attempt to address this question without getting too programmatic and telling receiving manufacturers how to do their jobs. I don't think people necessarily appreciate the difficulty of a receiver regulation regime that would be comparable to the transmission regime that we have right now because, with receivers, you can't test them meaningfully in the lab. You have to test them in the field. And to a degree, what you're testing in the field is not even the receiver itself but the environment and the interaction of the receiver with the overall geographical environment at that point in time, with that particular level of solar radiation, etc. It gets very complicated very fast. What I’m hoping to come out of this proceeding is something of a rights regime, where it's possible to say that "In order to operate at a particular service you have to accept a certain level of interference before you can raise a harmful interference claim," effectively creating a safe harbor for conforming transmitters. 

We look at a number of approaches. My favorite is the one that I've just outlined, the harm-claim-threshold approach. By getting to some sort of a regime like that, my hope is two-fold: First of all, that we highlight areas where there are still possibilities for great spectral gains because of increasing receiver efficiency, and thus asking the question: "To what degree continued receiver inefficiency in the large guard bands that are required to support it?" And asking the question: "To what degree that’s still in the public interest?" The second thing is, by getting to a high degree of certainty – or at least a much higher degree of certainty – that you're operating within a safe harbor, hopefully entities planning to increase service and engage in further buildouts will have a greater degree of security and not feel that at any point that they could be subject to criticisms despite operating within the terms of their license.

Discussing spectrum, Commissioner Simington stated: "The difficulty is, at this point, there is no greenfield left." And the difficulty is magnified because of Americans' demand for and expectations of continuing improvement in service:  

To pick one example, wireless data consumption, on a per capita basis, my back-of-the-envelope calculation suggests, has gone up by a factor of about 140 times in the past ten years. Freeing up spectrum for this use and for the IoT uses that are going to ride on top of 5G networks and perhaps eventually be even larger than consumer commercial uses, there is going to need to be a lot freed up for that. Likewise, there is going to need to be things freed up for relatively high-powered unlicensed uses. And we can't do that while continuing to give blanket respect to receivers that were designed in another era…receivers adapted for an interference environment that is increasingly irrelevant as we continue buildout.

Yet Commissioner Simington emphasized his opposition to the FCC taking a proscriptive regulatory approach to the issue of receiver interference immunity:

Do we want to say to people: "You should fix your receivers"? That's hard to say at a regulatory level. It would, in a certain sense, require the FCC to become the R&D shop for the industry, and I don't think anyone wants us to do it. And I don't know we could do it without completely changing the face of the agency, going on a hiring binge, and we'd out of step with international norms. So there are a lot of reasons not to take that approach.  

For more from Commissioner Simington and the other panelists, check out the video for #FSFConf14. 

(*Note: The #FSFConf14 quotes contained in this blog are based on an unofficial, edited transcription made by the author of this blog. The edits were made for purposes of readability but none of the meaning was changed in doing so.)